Rackspace CTO Responds to Amazon Price Drop

By Ian Armas Foster

July 17, 2013

A public cloud setup and a hybrid cloud one are incompatible for comparison, according to Rackspace Chief Technology Officer John Engates. However, the perception is that Amazon and Rackspace are general competitors in the cloud space, and when Amazon announces a cost reduction that could seemingly cut into Rackspace’s business, and has incidentally has ended up dropping the Rackspace stock by 8.5 percent, there exists a necessity to shed light on those differences.

Engates argued that the differentiation between them and AWS lies in the definition of ‘dedicated computing.’ “The real conflict lies in the way that AWS defines dedicated computing, which is at odds with the view of the rest of the industry, including Rackspace,” Engates wrote.

“Many of our customers come to us from a one-size-fits-all public cloud,” Engates, expanding on those differences, “and they tell us that the hybrid cloud approach has improved the performance, reliability and overall cost of their infrastructure.”

He continued to note that AWS’s propensity for operating instances solely in the public cloud and mentioning how different their hybrid-cloud approach was.

“EC2 dedicated instances are essentially EC2 cloud instances that run on single-tenant hardware dedicated to a single customer account. They offer certain compliance advantages over standard AWS instances for customers who don’t want to share servers with other customers.” Engates said in explaining what Amazon’s dedicated computing infrastructure accomplished. For him, however, the term ‘dedicated’ represents a higher degree of isolation and security.

Further, he argues that such dedication leads to higher performance. “[The EC2 instances] do not provide the true isolation that customers get on dedicated, bare metal servers. True dedicated servers offer superior performance and customization.”

The Rackspace definition of dedicated hardware involves an element of hosting within an institution’s facilities. In those cases, the information could be more secure and the applications more customizable, as they are partially run with full-time servers. “The public cloud is a powerful technology,” Engates summarized, “but it isn’t the answer for every business or every workload. Customers want to run the cloud where they want (whether on premise or in a vendor’s datacenter), how they want, and in the combination that best fits their applications. In many cases, dedicated hardware will play a key role.”

Engates sought to both quell worries about Rackspace’s place in the cloud space as well as establish the viability of hybrid cloud from a performance and cost perspective. It will be worth following how those differences propagate themselves over the next few months.

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